President Uhuru Speech AS He Address The Nation On 16% VAT.

Fellow Kenyans, as the president i have a constitutional duty to ensure that legislative instruments presented for my signature conform to our national aspirations and fulfill government basic obligations to our people and also to ensure that they are implementable.

The Finance bill 2018/2019 brought to me yesterday felt short of this threshold. It protected the status quo and sacrificed our bigger vision. It took the easy part instead of rising to the challenges of our time. It was good politics, but bad leadership.

As you already might know, i returned it to parliament with the number of modifications designed to cure this short comings. Ladies and gentlemen, the 2010 constitution widens Kenya’s democratic space. It also fundamentally altered the structures and function of government.

With Our new constitution, we have seen substantial increase in political representation at every level. We now have two houses of parliament. The national assembly has grown from a membership of 290 to 349. And our new senate has 67 elected and nominated members. We also have 47 governors, 47 deputy governors and 47 new counties assemblies in which sit more than 1000 members of county assembly. Additionally we have 16 independent offices and commissions excluding our judiciary. As you can see the enjoyment of the new rights that we gave ourselves in 2010 has been expensive. We are all very proud at a speed which we have implemented the new constitution and devolve government to the people.

We have already transferred over one trillion Kenya shillings to county governments since 2013. We have as a results seen major improvement in service delivery and also improvements in the lives of Kenyans. And that is why we will continue to protect devolution and our constitutional order not withstanding the cost.

In addition to supporting devolution, your taxes have also been used for a very aggressive and successful development agenda. Today millions of Kenyans travel on new roads build by my administration and other roads are still under construction. Millions of homes have been connected with electricity and our mothers now have access to safer and cheaper maternal care. In addition to free primary education, parents today can now sent their children to day secondary schools and free textbooks are available for our children.

I wish just to remind Kenyans that Memorandum of understanding  between Kenya and the United States of America for direct flights was signed in 2008 and its only now after consistent investments in the Jomo Kenyatta International Airport under my administration, that the first direct flight to America has become a reality. And the Standard Gauge Railway has been nothing short of transformation build in record time between Mombasa and Nairobi.

On the Social front, we have more than doubled the number of people with access to healthcare under NHIF. And in addition, elderly Kenyans numbering more than 700,000 amount to ease their lives. But all this fellow Kenyans cost money. Your taxes have paid for clear and touchable progress.

Funding devolution to a tune of over one trillion Kenya Shillings since 2013 was our bold decision. Fighting corruption and demolishing illegal structures is a bold decision to some while it remains unpopular to others. Initiating major social protection programs for the vulnerable in our society is bold decision. All of this Fellow Kenyans, we have done without any substantial increase in taxes over the period.

Fellow Kenyans i now wish to address myself to the question of VAT on the petroleum products. But before i do so i would like to mention two thongs.

Reforms to the VAT taxation was first introduces in the VAT act of 2013. Under the transitional plans passed by the parliament, certain good including petroleum products were to be exempt from the VAT to allow for the gradual implementation of the new tax.

This exemption were set to expire in August of 2016 but was extended for the far period of two years to the end of August 2018.

The purpose of this tax was simple. We have to pay for the new constitutional order as well as the public services on which Kenyans depend alike and this cost money.

Further delay in the implementation of the tax will compromise our ability to deliver basic services to Kenyans and to maintain the trajectory  of our development.

Fellow Kenyans, i have spent the last few days  listen to a wide cross section of opinions. And it is clear that you are all troubled by the effects of the rise in the prices of petroleum products and its impact on the cost of living. I have heard and understand your concerns which is why i have proposed as part of my memorandum to cut VAT on petroleum products by 50%. this means from 16% to 8%.

Should parliament accept this proposal, the price of super petrol will drop from the current price of Ksh. 127 to about Ksh. 118. And diesel will drop from Ksh.115 to about Ksh. 107.

Just as business owners took the new VAT rate as an opportunity to increase the cost of goods and services, i expect them not to take the advantage of fellow Kenyans and to lower their prices commentary without any delay. That done fellow Kenyans we still facing a financing gap. This measure alone will not balance our budget as required by law.

Therefore i have further proposed wide range in cuts in spending across all arms of government. The cuts target less essential spending such as hospitality, foreign and domestic travel, training and seminars and other similar categories. This budget cuts ask all of us in government that we tighten our belts. It also ensure that the sacrifices made by the tax and compliance Kenyans are matched by discipline from all of us in the public service.

I want to assure Kenyans that their taxes will be used well and that is why in my memorandum, i have also propose to increase the resources available to the institutions entrusted to fight corruption specifically i have increase funding to the judiciary to speed up the completion of cases concerning corruption and economic crimes.

Further, i have increase allocation to the office of the DPP as well as the other investigative agencies. I expect this bodies to work closely together to help us restore our faith in public institutions.

Fellow Kenyans, as president it is my first responsibility to put Kenyans first,hose living today and your children who will inherit this country tomorrow. This means i must make a delicate balance between short term pain and long term gain.

Fellow Kenyans we have a country to transform and we must make bold decisions to achieve our vision. I ask all Kenyans to join me and for all of us to join hands to work together for us to achieve this common vision of a free, just, democratic, socially inclusive and a society which shares prosperity for all.

I thank you and my God bless Kenya.

 

 

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